Chips love AI, software suffers

00:00:00: Geopolitical tensions in the Middle East remain elevated as markets navigate fragile ceasefire dynamics alongside rising energy prices.

00:00:08: Oil is consolidating near-the-hundred dollar per battle mark again this morning, feeding renewed inflation concerns across the globe just as developed market yields edge higher and economic data points out slowing economy activity.

00:00:22: Equities meanwhile are fragmented.

00:00:24: Software stocks came under renewed pressure yesterday after disappointment from IBM announcement raised concerns about AI disruption, whilst my conductor names continue to outperform their peers on sustained AI-driven demand.

00:00:39: Intel's strong results after the bell highlighted renewal momentum in data center and CPU demands.

00:00:45: So welcome to Swisscout.

00:00:47: daily market talk is Friday April twenty fourth I'm And we will cover a lot of topics again today.

00:00:55: But before we do, please keep in mind that opinions are my own and this is not financial advice.

00:01:10: So geopolitical tensions remain elevated.

00:01:12: The ceasefire holds right now, but it is fragile.

00:01:15: I mean the US Navy reportedly boarded a super tanker carrying Iranian oil in the Indian Ocean while U.S President Donald Trump ordered American forces to shoot boats placing mines in the Strait of Hormuz.

00:01:29: Iran on the other hand frustrated by Donald Trump's blockade and public bashing Is not willing to come to negotiation table.

00:01:37: so oil prices console near the hundred dollar per barrel level this morning as developed market yields are rising along with oil prices that fuel inflation expectations around the world and equities are hesitant near their all-time high levels.

00:01:52: Indeed, the PMI numbers yesterday came to confirm negative impact of soaring energy prices on economic activity across the globe.

00:02:01: The numbers yesterday showed that European services were particularly hit by soaring energy prices.

00:02:08: So the euro dollar return below is a hundred-day moving average and it's testing the two hundred day moving average to the downside.

00:02:15: presently, a broadly stronger U.S.

00:02:18: dollar also way on the global FX complex with the Dollar Index testing its own fifty days moving average up side as geopolitical tensions remain while high into the weekend and rising oil prices increased demand for US dollars.

00:02:33: As such, the rally across global equity indices stole.

00:02:36: yesterday The SOC-Six Hundred Index closed a session flat While S&P Five Hundred retreated from an all time high level.

00:02:44: A sharp sell off across software stocks also added to their worries Yesterday after results or announcements from IBM failed to reassure investors that cohabitation with AI will be smooth.

00:02:57: They indeed highlighted slowing software growth instead and didn't upgrade guidance, reinforcing doubts among investors about the sector's momentum.

00:03:07: And revived fears that AI is indeed disrupting traditional software models.

00:03:13: so investors sold a whole sector not just IBM iShares expanded technology software ETF tanked more than five percent in yesterdays trading session.

00:03:23: So that's a lot of also fees into worries about the private credit remember tied to these software companies.

00:03:30: In short, The Software Demons were back in yesterdays trading session.

00:03:36: on the flip side off this trade though the AI enablers continue to extend their gains.

00:03:40: chip stocks gained again with Van Aks my conductor ETF hitting a fresh all-time high level Yesterday as appetite for AI investment and AI Enabler returns Gently these days.

00:03:54: Intel earnings after the bell put a cherry on top of this story because the company announced better than expected earnings last quarter and bettered in expected guidance as well, As demand for data center chips to power.

00:04:06: massive AI expansion lifted its flagship beyond server processors.

00:04:12: Intel has been unable market GPUs to compete with rivals like NVIDIA or AMD But they are very, very strong in terms of CPUs.

00:04:22: and guess what?

00:04:23: The CPU demand is soaring today as companies build out AI systems.

00:04:28: They need a lot off these CPUs to run everything around the GPU's.

00:04:33: NVIDIA had also launched CP on its own earlier this year.

00:04:36: Remember to capture that demand, the great CPU.

00:04:40: So Intel is in good place right now with their CPU business plus.

00:04:44: Intel has found your business as well there waiting to fulfill Borders member and the US government's backing to bring production back.

00:04:51: America is certainly helping.

00:04:53: And if it makes any difference, Elon Musk said he would use Intel technology to build his in-house chip manufacturing plans.

00:05:00: so improving fortunes for intel thanks to a renewed focus on what they're good at making CPUs send shares twenty percent higher after hours trading we will likely see Intel benefit more from their new CPU demand shortage.

00:05:17: What a turn of events!

00:05:19: Across the Pacific Ocean, Korean SK Hynex which is their membership maker ECODE has similar story.

00:05:25: Their profit jumped fivefold to over twenty-five billion US dollars last quarter while revenue tripled past thirty-five million USD mark that's more than half what NVIDIA announced before and tripled Intel's revenue.

00:05:39: so it is indeed big number.

00:05:42: But SK Hynex investors were not necessarily impressed with these numbers, Not as much as Intel Investors.

00:05:48: As the surge in revenue has been pressed in.

00:05:50: The stock is indeed up by nearly seven hundred percent since this time last year.

00:05:55: And the surges partly due to the fact that we are now In a membership boom cycle That SK hynex expected to last for another three years.

00:06:03: but after that if history's any guidance There will be plenty of chips in the market and We'll enter into both cycles.

00:06:12: Now, there is a possibility that AI helps memory chip makers break that cycle.

00:06:16: But what's more realistic?

00:06:17: Is that AI demand will make the boom cycle longer but not keep the sector in the boom phase forever.

00:06:25: So profit taking on blockbuster SK high.

00:06:28: next results are on the menu this morning in South Korea following earnings as a sign that it may be time for certain downside correction and consolidation Elsewhere, TSMC in Taiwan also soared to an all-time high level this morning as nation's financial regulator lifted the cap on single stock holdings.

00:06:53: And China's deep seek launched a preview of his highly anticipated new model called VIVO model sending Chinese chip makers stocks up as well.

00:07:03: In this context, Huahong in Hong Kong rallied more than seventeen percent this morning while Canberra can gain more that five percent and SMIC gained two point eighty percent.

00:07:13: Alibaba on the other hand which considers investing As such, the Hansang Index rebounded from an early dip in Hong Kong today and the technology-heavy Nasdaq Futures outperformed their US & European peers this morning at a time I am talking here.

00:07:33: Geopolitical uncertainties will likely keep appetite strong in technology names that are more resilient to these tensions as investors continue feel uncomfortable getting exposure to industries that are shaken by the war and rising energy prices.

00:07:49: And a negative implication of this war for global growth in commodity is gold, which has remained quite muted face with the Middle East War or remains unloved by investors as the US dollar serves us better.

00:08:01: hedge today for the actual oil price boosted inflationary environment.

00:08:06: Price of an ounce below his hundred day moving average this week strengthened and we could see a further downside pressure in the yellow metals price on.

00:08:22: But price retreats in gold are actually great opportunities for long-term investors to buy the dips because Gold remains in this positive trend globally as central banks and other institutions Are now replacing their US Treasury holdings by the precious metals on The back of they uncertainty regarding their relationship with the U.S.. That said, the dip however could be at a distant forty one hundred to forty two fifty dollar range For gold including your two hundred day moving average.

00:08:51: and watch them, so no rush yet.

00:08:54: So this is all for this week, guys.

00:08:55: I'm Yipeko Skardyshkuya and thank you for joining me And Thank You For All Your Beautiful And Supportive Commands!

00:09:02: I hope This Episode Of Market Talk Has Been Helpful And It Has Been Insightful To You so Please Do Not Hesitate to Leave Your Comments Your Reactions And Your Questions Below.

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00:09:36: Until then good day trading have a safe weekend!

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